Madam Speaker, I listened with interest to a number of previous speakers from a variety of parties putting forth their ideas. I am a little confused, I must say, about their positions.
My colleague from Kamloops who represents the New Democratic Party said that his party would support the bill, that it thinks it is worth supporting. Yet I heard him give a whole list of issues with which he had a problem. I am a little confused as to why the New Democratic Party would be supporting it.
I never got the impression one way or another whether members of the Conservative Party are supporting it although they did put forward a motion that the bill should go to committee. They do not want to debate it at third reading or have a vote at third reading. They want to put it before the committee for further study. As I continue I may reflect on other things I heard from various speakers.
I will address the question of what is equalization, what it means. There is not a Canadian who does not believe in the concept of equalization, that those provinces with a greater ability to provide a certain level of services should help those provinces without the ability or capacity to deliver the same level of services. The concept of equalization is supported by most Canadians.
The difficulty we get into is in applying this concept in legislation. Many speakers before me have talked about the complexity of it. They have said that the formula was so “complex, complicated, convoluted”, to quote my colleague from Kamloops, that people do not understand what it is or how we try to level the playing field between provinces.
My colleague from Elk Island sat on the finance committee when the bureaucrats came before it to talk about equalization payments. The bureaucrats admitted that they were probably the only ones who understood what the formula was all about.
As has been mentioned by others, it is very distressing that there is a handful of people, if that, who understand how the government is spending Canadian tax dollars. Canadians would be concerned that there may only be a handful of people who understand how the government is spending tax dollars.
We are not talking about a few tax dollars. We are talking about $50 billion over the next five years. We are talking about $10 billion of our tax dollars a year. We have maybe five people who understand how it is being distributed. We have a problem. Not only in this legislation but in all legislation we should be striving for clarity and simplicity so Canadians can understand what it is that their government is doing to them.
Another problem with this program is that there is no consultation. The government is not interested in talking to Canadians about how it will spend the $50 billion. It is not interested in bringing the ordinary Canadian or the business community or the legislators like ourselves into a meaningful debate.
That is another indication of the arrogance of the government. It continues to feel that it knows better than anybody else to the exclusion of a conversation with anybody else how to govern the country, how to take $50 billion and distribute it from the have provinces to the have not provinces.
We have heard other colleagues ask if it is fair in a country that is as well off as Canada where we have such a high standard of living according to the United Nations, that we have three provinces carrying the fiscal burden. Three provinces are providing to seven provinces. Is that fair? Should we not be looking at whether or not that adequately represents reality?
For Canadians who may be watching and trying to understand equalization and what it means, they should not feel bad if they do not understand it because there is nobody else in this country, bar a few civil servants who have concocted the formula and have manipulated the formula for whatever reason, who do understand it.
I hope to clarify some of the issues that we feel need to be addressed, to properly deal with trying to create a level playing field between provinces that have the capacity to raise revenue and provinces that do not have the same capacity. Is it necessary to try to accomplish that? I suggest it is. It is a very Canadian thing to do, to try to help those who are less fortunate or may not have the same ability. It is readily supported by Canadians all across the country but they are asking, and rightly so, is it properly managed? Is the program accountable for its end result and delivery of the services? Is it fair? Is this a program that has the concept of fairness?
I will point out a number of things on which I will challenge that the concept of this bill deals with that. To make equalization and the formula work, there has to be the same kind of tax system in all the provinces so that they are all being compared on an equal basis.
Not all the provinces have the same type of tax system. In essence we are dealing with a tax system in one province and a completely different tax system in another province. In other words, we are dealing with a hypothetical tax system that does not work or does not exist. We are trying to blend them.
The cost of production to create the taxes or source of revenue is not the same in all provinces. There is no way that the cost of taking the trees off a mountainside in a remote area of British Columbia is the same as taking a tree from a flatter area closer to civilization, yet that is not taken into account.
We heard again from my colleague from Kamloops that there is a recognition that new oil sources are more expensive to retrieve than old oil sources. That is very interesting because Alberta, one of the have provinces, depends largely on oil revenue and would have considered the Alberta tar sands as a new source of oil. Certainly it is far more expensive to extract it than the old traditional source of oil, yet there was no compensation for that in the formula.
There was no recognition in the formula to deal with the new type of oil technology that was required for the tar sands. But all of a sudden because of the Hibernia oil field, this new recognition has been brought into the system. The revenue from the Hibernia oil field will only be 70% considered rather than the 100% in another province. This does not add to the fairness of how we deal with revenue sources.
Thirty-three tax areas are brought into consideration in this formula. Another one is property assessment, property taxes. Those can change overnight. All we have to do is ask the individuals who own property on the Musqueam how quickly property values disappear. All it takes is a change in circumstances for that property value, upon which property taxes are considered and are part of the formula, to disappear completely. There is no recognition of those differences.
There is no recognition that property values are different from one end of the country to the other. I would suggest that in my area, a person who bought a single family home could probably buy for the same amount of money a 15 or 20 block apartment elsewhere and have revenue property to help sustain them. That kind of consideration is not taken into account in this equalization payment.
There is a high cost of living in some of the major centres in this country. A large portion of the income of individuals is used just to provide housing. The differences from one part of the country to another are not taken into consideration in the equalization formula.
There is the politicizing of the formula. We have heard from other members about what happened in Newfoundland. It had a deficit and two days before the writ was dropped for a provincial election, the deficit suddenly disappeared because there was more money in equalization to put into the pot. Therefore, Newfoundland did not have a deficit but lo and behold it had a surplus.
There is no commitment on paper for that money. It was simply the ability of a government to say the discrepancy is there because nobody understands the formula, nobody understands where this money is being spent or how it is being spent. For political reasons they can reach into the pot and say they miscalculated and give out some money for political purposes.
That is not good enough. The transparency and clarity are not there. It allows for the transfer of money to be manipulated for political purposes. The lack of transparency and accountability allows for manipulation not only for political purposes but for other purposes as well.
When a situation is not clear and not accountable, it can allow a formula to be changed, to be interpreted without anybody knowing how to challenge it, again because of the complexity of the equalization payment and the lack of transparency. It is very dangerous for a government to allow itself to get into a position where it cannot account for or justify where our tax dollars are being spent.
I would like to talk about the end result and what equalization in the long run does to our country. My colleague from Kings—Hants brought up the issue of equalization payments providing disincentives for provinces to develop their economies in such a way that they no longer need support from the federal government. I would assume that as the member represents Atlantic Canada, he is aware of what has happened in Atlantic Canada.
I want to share some numbers with my colleague. They are percentages of revenues transferred by the federal government to the provincial governments. These are percentages of the budgets that federal transfers equate.
In Newfoundland the provincial budget relies on 43.7% from federal transfers, almost half of its budget. It is 36.8% that Prince Edward Island depends on federal money to go into its budget. In Nova Scotia it is 40.3%. In New Brunswick it is 38.2%. In Quebec it is 15.3%. In Manitoba it is 29.3%. That shows the heavy reliance by those considered have not provinces on the federal government to provide them with their financial resources.
I want to repeat that my colleague from Kings—Hants said that part of the problem is that we have created disincentives for those provinces to be able to stimulate their economies and to create an economic environment so that they do not depend on these federal transfers. In other words, what he implied and what I support is that the concept has created a dependency of the have not provinces upon the federal government. It has created a situation where these provinces feel that it is not worth their effort and not worth their consideration to remove themselves from a position of receiving transfer payments from the other provinces.
I can speak from my own experience that this is not a healthy position to put any province in. When a province loses its desire to better itself, to better its economy because it might cost money, that is not a healthy environment. The last thing this government should be trying to do is to continue the circumstances in 1999 going into the next millennium where three provinces are supporting seven other provinces. It just does not seem right in a country as bountiful as Canada.
The next question we have to ask ourselves is does the formula allow for fairness in the provinces. I would suggest that it does not. I do not think the province of British Columbia feels that it is getting a fair shake. I cannot speak for Alberta or Ontario, but I can speak for British Columbia.
What we do know is that although its economy has been number 10 in growth in Canada over the last three years, British Columbia is still considered a have province. We are still expected to take money out of our economy that is not growing and put it into the economy of other provinces that have a higher growth rate. We are still expected to put money into provinces that are providing services to their citizens that British Columbia does not have the capacity to provide to its own.
We see that in the dental care program in the province of Quebec. The province of Quebec is able to provide free dental care, all dental care to children under 10 years old. Children in British Columbia do not get free dental care. But the taxpayers in British Columbia are funding Quebec, or putting money into the province of Quebec, so that it can offer free dental care to its children.
Somehow I do not think that was the intention of the equalization payments. I think the intention of the equalization transfer was so that all provinces could have at least a basic service, that all provinces could provide to their citizens the same thing that another province could provide, not something more, not something better. But that is what is happening.
Look at education and the university tuition fees. Tuition fees are lowest in the province of Quebec.
Why should the students and the taxpayers in British Columbia be sending money to the province of Quebec so it can provide cheaper post-secondary education for its children when it is not available to the children in British Columbia?
When we talk about fairness I suggest the taxpayers in my constituency and in my province would feel that is not being shown in the transfer payments based on equalization.
Having said all this, what we have to ask ourselves is what would be more acceptable to all Canadians. I want to address a number of issues here. One is that the province of Quebec is constantly arguing as to whether the federal government should be interfering in its—